North Carolina renewable energy portfolio standard and its significance for NC forest landowners

NC Woody Biomass
“Nature’s renewable energy!”
http://www.ces.ncsu.edu/fore
stry/biomass.html
Extension Forestry
Campus Box 8008
NC State University
Raleigh, NC 27695-8008
The North Carolina
Renewable Energy Portfolio Standard
And Its Significance for NC Forest Landowners
On August 3rd 2007, the North Carolina General Assembly adopted a
Renewable (energy) Portfolio Standard through passage of Senate Bill
3-2007.1 Unlike Green Power programs such as NCGreenPower
(www.ncgreenpower.org) that use voluntary donations by utilities’
customers to make available renewable-based electricity, Renewable
Portfolio Standards (RPS) require that a certain percentage of a utility's
overall energy sales must be derived from renewable resources.
Portfolio Standards most commonly refer to electric sales measured in
megawatt-hours (MWh), as opposed to electric capacity measured in
megawatts (MW). RPS provisions vary by state. North Carolina and
Texas are the first two states in the Southeast to enact RPS legislation.
Why a Renewable Portfolio Standard?
The decline in fossil fuel availability and the rising costs of extraction
and transportation, combined with increasing demand in industrializing
countries, as well as concerns about global climate change are all
contributing to increased interest in renewable energy in the U.S. Coal
accounts for about three fifths of the electricity generation in North
Carolina. Mercury, sulfur, and nitrogen compounds released into the
atmosphere from coal combustion have come under fire in the region
and world. Displacement of coal through an RPS could reduce each of
these concerns by using a state-based “home-grown” fuel. Key
economic and social benefits of an RPS result from having NC supply
its own needs, potentially keeping millions of dollars in state that can
have multiplying effects throughout local communities.
Key NC RPS Provisions
The North Carolina RPS is a complex piece of legislation that spells
out provisions for use of renewable energy sources, energy efficiency
measures and energy demand reductions. The legislation requires all
investor-owned utilities in the state to displace 12.5% of 2020 retail
electricity sales, with a minimum of 7.5% renewables-based in state
generation and 5% or more in energy efficiency measures. Municipal
utilities and electric cooperatives must meet a target of 10% renewables
and energy efficiency by 2018 under slightly different rules. The bill
also provides for improved net metering, interconnection standards, and
values the use of combined heat and power (CHP) technology.2 The
key provisions of the bill are that by the year 2021 and thereafter 12.5%
of 2020 North Carolina retail sales by public electric utilities must
come from a combination of renewable energy-based generation and
energy-saving measures.
2
Eligible Renewable Energy Sources
Eligible energy resources include solar-electric
(photovoltaics), solar thermal (such
as solar hot water and heating), wind,
hydropower up to 10 megawatts (MW),
ocean current or wave energy, biomass
from farms and forests, landfill gas, waste
heat from renewables, and hydrogen
derived from renewables. There are small
specific minimum requirements for solar
and energy from swine and poultry wastes.
However, it is expected that as much as
60% or more will be met using woody
biomass produced from the forest residues.
Woody Biomass Source
Most wood processing and manufacturing
mill waste such as sawdust, bark, and
shavings are already used for energy
internally in those facilities. New woody
biomass-based energy under the RPS will
come directly from the forest thinning and
logging activities. Examples include
logging residues such as slash (unused
limbs and tops) and standing otherwise un-merchantable
stems that are left on site
after logging. In cases where pulpwood
markets are non-existent or minimum,
wood normally harvested as pulpwood may
be used. An estimated 8 million green tons
of woody biomass can be sustainably
harvested in North Carolina annually.
Much of the biomass energy for the RPS
will come from mixing wood with coal (co-firing)
at existing utility-owned power
plants or in dedicated privately owned
power plants that predominantly burn
biomass.
How Does Forestry Benefit?
Benefits to the state’s forests, landowners,
industry, and loggers are expected to
include:
• Reduced site preparation costs for
regeneration
• Improved opportunity to manage for
high-value timber products by
providing markets for thinnings and
other lower-value stems
• Improved forest health by providing
markets for diseased and damaged
trees, off-site species, and density
management
What Businesses/Industries Will Benefit
from the North Carolina RPS?
A Renewable Energy Credit or REC is a
tradable instrument that results from the
generation of one megawatt hour of
electricity or equivalent energy supplied by
a renewable energy facility. Of special
importance to industry is the opportunity to
generate RECs through combined heat and
power (CHP) applications. Combined heat
and power (CHP), also known as
cogeneration, is an efficient, clean, and
reliable approach to generating power and
thermal energy from a single fuel source.
Where that fuel is a qualified renewable
resource, both the electric power generated
and the excess heat qualify as RECs. The
value of these RECs will be shared by those
in the fuel-supply chain and can also
financially benefit farmers, forestland
owners, and loggers.
As much as 60% or more of
eligible renewable energy sources
could be met using woody biomass
from forest residues.
3
Other Benefits of the NC RPS
The NC Sustainable Energy Association3
estimates that the legislation may result in:
• $2.5 billion in new renewable
energy investments by year 2018
and $350 million in energy
efficiency investments by year
2021.
• Eliminate the need for about 1,800
megawatts of coal and nuclear
power plants
• Creation of 2,700 annual jobs at
good wages statewide
• Reduction of greenhouse gas
emissions by at least 13 million
metric tons by 2018
References
1 NC General Assembly, Session Law
2007-397, Senate Bill 3
http://www.ncga.state.nc.us/Sessions/2007/
Bills/Senate/PDF/S3v6.pdf
2 Database of State Incentives for
Renewables & Efficiency
http://www.dsireusa.org/library/includes/m
ap2.cfm?CurrentPageID=1&State=NC&RE
=1&EE=1
3 NC Sustainable Energy Association
http://www.ncsustainableenergy.org/
www.ces.ncsu.edu/forestry/biomass.html
Published by North Carolina Cooperative Extension
Distributed in furtherance of the acts of Congress of May 8 and June 30, 1914. North Carolina State University and North Carolina A&T State University commit themselves
to positive action to secure equal opportunity regardless of race, color, creed, national origin, religion, sex, age, veteran status or disability. In addition, the two Universities
welcome all persons without regard to sexual orientation. North Carolina State University, North Carolina A&T State University, U.S. Department of Agriculture, and local
governments cooperating.
copies of this public document were printed at a cost of or per copy.
Prepared by
Dennis Hazel, NCSU Extension Forestry
Alex Hobbs, NC Solar Center
WB-0003/2008

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NC Woody Biomass
“Nature’s renewable energy!”
http://www.ces.ncsu.edu/fore
stry/biomass.html
Extension Forestry
Campus Box 8008
NC State University
Raleigh, NC 27695-8008
The North Carolina
Renewable Energy Portfolio Standard
And Its Significance for NC Forest Landowners
On August 3rd 2007, the North Carolina General Assembly adopted a
Renewable (energy) Portfolio Standard through passage of Senate Bill
3-2007.1 Unlike Green Power programs such as NCGreenPower
(www.ncgreenpower.org) that use voluntary donations by utilities’
customers to make available renewable-based electricity, Renewable
Portfolio Standards (RPS) require that a certain percentage of a utility's
overall energy sales must be derived from renewable resources.
Portfolio Standards most commonly refer to electric sales measured in
megawatt-hours (MWh), as opposed to electric capacity measured in
megawatts (MW). RPS provisions vary by state. North Carolina and
Texas are the first two states in the Southeast to enact RPS legislation.
Why a Renewable Portfolio Standard?
The decline in fossil fuel availability and the rising costs of extraction
and transportation, combined with increasing demand in industrializing
countries, as well as concerns about global climate change are all
contributing to increased interest in renewable energy in the U.S. Coal
accounts for about three fifths of the electricity generation in North
Carolina. Mercury, sulfur, and nitrogen compounds released into the
atmosphere from coal combustion have come under fire in the region
and world. Displacement of coal through an RPS could reduce each of
these concerns by using a state-based “home-grown” fuel. Key
economic and social benefits of an RPS result from having NC supply
its own needs, potentially keeping millions of dollars in state that can
have multiplying effects throughout local communities.
Key NC RPS Provisions
The North Carolina RPS is a complex piece of legislation that spells
out provisions for use of renewable energy sources, energy efficiency
measures and energy demand reductions. The legislation requires all
investor-owned utilities in the state to displace 12.5% of 2020 retail
electricity sales, with a minimum of 7.5% renewables-based in state
generation and 5% or more in energy efficiency measures. Municipal
utilities and electric cooperatives must meet a target of 10% renewables
and energy efficiency by 2018 under slightly different rules. The bill
also provides for improved net metering, interconnection standards, and
values the use of combined heat and power (CHP) technology.2 The
key provisions of the bill are that by the year 2021 and thereafter 12.5%
of 2020 North Carolina retail sales by public electric utilities must
come from a combination of renewable energy-based generation and
energy-saving measures.
2
Eligible Renewable Energy Sources
Eligible energy resources include solar-electric
(photovoltaics), solar thermal (such
as solar hot water and heating), wind,
hydropower up to 10 megawatts (MW),
ocean current or wave energy, biomass
from farms and forests, landfill gas, waste
heat from renewables, and hydrogen
derived from renewables. There are small
specific minimum requirements for solar
and energy from swine and poultry wastes.
However, it is expected that as much as
60% or more will be met using woody
biomass produced from the forest residues.
Woody Biomass Source
Most wood processing and manufacturing
mill waste such as sawdust, bark, and
shavings are already used for energy
internally in those facilities. New woody
biomass-based energy under the RPS will
come directly from the forest thinning and
logging activities. Examples include
logging residues such as slash (unused
limbs and tops) and standing otherwise un-merchantable
stems that are left on site
after logging. In cases where pulpwood
markets are non-existent or minimum,
wood normally harvested as pulpwood may
be used. An estimated 8 million green tons
of woody biomass can be sustainably
harvested in North Carolina annually.
Much of the biomass energy for the RPS
will come from mixing wood with coal (co-firing)
at existing utility-owned power
plants or in dedicated privately owned
power plants that predominantly burn
biomass.
How Does Forestry Benefit?
Benefits to the state’s forests, landowners,
industry, and loggers are expected to
include:
• Reduced site preparation costs for
regeneration
• Improved opportunity to manage for
high-value timber products by
providing markets for thinnings and
other lower-value stems
• Improved forest health by providing
markets for diseased and damaged
trees, off-site species, and density
management
What Businesses/Industries Will Benefit
from the North Carolina RPS?
A Renewable Energy Credit or REC is a
tradable instrument that results from the
generation of one megawatt hour of
electricity or equivalent energy supplied by
a renewable energy facility. Of special
importance to industry is the opportunity to
generate RECs through combined heat and
power (CHP) applications. Combined heat
and power (CHP), also known as
cogeneration, is an efficient, clean, and
reliable approach to generating power and
thermal energy from a single fuel source.
Where that fuel is a qualified renewable
resource, both the electric power generated
and the excess heat qualify as RECs. The
value of these RECs will be shared by those
in the fuel-supply chain and can also
financially benefit farmers, forestland
owners, and loggers.
As much as 60% or more of
eligible renewable energy sources
could be met using woody biomass
from forest residues.
3
Other Benefits of the NC RPS
The NC Sustainable Energy Association3
estimates that the legislation may result in:
• $2.5 billion in new renewable
energy investments by year 2018
and $350 million in energy
efficiency investments by year
2021.
• Eliminate the need for about 1,800
megawatts of coal and nuclear
power plants
• Creation of 2,700 annual jobs at
good wages statewide
• Reduction of greenhouse gas
emissions by at least 13 million
metric tons by 2018
References
1 NC General Assembly, Session Law
2007-397, Senate Bill 3
http://www.ncga.state.nc.us/Sessions/2007/
Bills/Senate/PDF/S3v6.pdf
2 Database of State Incentives for
Renewables & Efficiency
http://www.dsireusa.org/library/includes/m
ap2.cfm?CurrentPageID=1&State=NC&RE
=1&EE=1
3 NC Sustainable Energy Association
http://www.ncsustainableenergy.org/
www.ces.ncsu.edu/forestry/biomass.html
Published by North Carolina Cooperative Extension
Distributed in furtherance of the acts of Congress of May 8 and June 30, 1914. North Carolina State University and North Carolina A&T State University commit themselves
to positive action to secure equal opportunity regardless of race, color, creed, national origin, religion, sex, age, veteran status or disability. In addition, the two Universities
welcome all persons without regard to sexual orientation. North Carolina State University, North Carolina A&T State University, U.S. Department of Agriculture, and local
governments cooperating.
copies of this public document were printed at a cost of or per copy.
Prepared by
Dennis Hazel, NCSU Extension Forestry
Alex Hobbs, NC Solar Center
WB-0003/2008